July 20, 2021
IPOs: So, Homeless Public Companies Are A Thing Now?
This Olshan blog addresses a topic I’ve been meaning to comment about for some time now. I’ve always thought that one of the most straightforward disclosure requirements in a registration statement is the direction on the cover page to disclose a company’s principal executive offices. Well, a pair of registration statements for recent IPOs suggest that this isn’t so straightforward anymore. This excerpt from the blog explains:
On the cover page of its Form S-1 IPO registration statement filed only a few months ago, Coinbase Global, Inc. indicated as follows with regard to the address and telephone number of its principal executive offices: “Address Not Applicable.” In a footnote, it further explained, “[W]e [are] a remote-first company. Accordingly, we do not maintain a headquarters.” An exhaustive search on EDGAR revealed that this was the first submission of its kind with only one similar filing on July 2 by Talkspace, Inc.
How can it be that a public company has no fixed address and/or phone number?1 Surely there must be some physical presence somewhere, even with the shift to work-from-home arrangements for many workers. Securities Exchange Act Rule 3b-7 defines “executive officer” as the company’s “president, any vice president … in charge of a principal business unit” or any other “officer” or “person” who “performs similar policy making functions.” Securities law commentators have suggested that the term “principal executive offices” would mean the place where the CEO and most other executive officers work most of the time. Given the SEC’s focus on accountability and enforcement, it seems puzzling that the SEC cleared this “end of the principal executive office” disclosure requirement.
Yeah, it’s puzzling to me too, but regardless of whether it’s technically permissible to not disclose an HQ on the cover page of an S-1, chances are we’re going to see more filings like this. That’s because there are a whole bunch of tech companies running around calling themselves “remote-first.” Oy vey . . .
Of course, the lack of an address is only the second weirdest thing about the cover page of Coinbase’s S-1. First prize goes to the cover page’s reference under the “copies to” caption to Satoshi Nakamoto, the pseudonym of the so-far anonymous creator of Bitcoin.
– John Jenkins